Progressive Politics in Minnesota, the Nation, and the World

Erik Paulsen = Corporatist - First, Last And Always

I get a lot of people argue that Hillary Clinton is a "corporatist" and not a true progressive. I think that's a lot of bunk, but right now I want to discuss who is the true corporatist....right here in Minnesota.

Erik Paulsen.

This guy doen't bother to represent real people. He truly believes that he is in Washington to represent business. But then I guess he takes the Supreme Court decision to heart - corporations are people.

Let's look at the record.

Erik Paulsen has been in the pocket of medical device companies throughout his career. He has successfully advocated for a moratorium on the device task that helps fund Obamacare....creating a windfall for companies like Medtronic.

Of course, not satisfied with that tax break, Medtronic changes their corporate address to Ireland so that they can avoid more taxes. All the while, building up offshore bank accounts, hiding their profits - and forcing the rest of us to pay their bills.

Although Paulsen voted against the Dream Act and voted for many of the Trump like immigration bills that came from this Congress, Paulsen managed to vote in favor of special visas that business wanted so that they can bring in high-tech workers from other countries...at the expense of American workers.

And how about energy corporations? Paulsen was right there for them as well. He voted YES on opening Outer Continental Shelf to oil drilling. He voted YES on barring EPA from regulating greenhouse gases. He voted NO on enforcing limits on CO2 global warming pollution. And he voted to bar greenhouse gases from Clean Air Act rules, and to declare that nothing in the Act shall be treated as authorizing or requiring the regulation of climate change or global warming.

When asked directly about climate change, Paulsen said he wasn't smart enough to know whether that's true or not. Well, he votes like he believes it.

Paulsen could easily fit into the Trump camp, except for one clear difference. Paulsen's corporate masters need him to support the TPP.

Paulsen puts it this way:

"We should not step away from the table on agreements such as TPP. The benefits that thoughtful trade agreements can bring to American businesses, their employees, and their families are too important to ignore."

Notice how he wants you to believe that somehow employees and families will benefit as well? He knows better. He only worries about his corporate "people" - he just likes to spin it differently. He doesn't talk much about his TPP support generally because Trump supporters do not like it. But the only people it matters to are the corporate interests - and they already know that Erik Paulsen is on their side.

Erik Paulsen, man of the people? No - he is definitely a man of the boardroom.

Medical Device Industry Simply Refuses To Pay Their Fair Share

But there are some points that keep getting brought up that lack clarity.

For instance, the Medical Device industry's claims about how it hurts the device makers and their workers....

But are any of those doom-and-gloom claims true? For observers in the policy world, and for fact-checkers in the media, tales of major job loss and stifled innovation in the medical device industry don't add up.

Here is a statement that looks skeptical...

In interviews and statements to MinnPost, Paulsen and Klobuchar recalled hearing constantly from business owners that the medical-device tax ended up preventing them from hiring more people and researching new technologies. "What the device tax means to the community," Paulsen says, "is, you have two fewer projects, a couple less engineers, borrowing from banks to pay off the tax."

Notice how there is no evidence offered. They heard about the problem, but from who? The medical device owners themselves. Paulsen only regurgitates what they tell them - a mouthpiece for the industry.

How about the threats to jobs?

The nonpartisan Factcheck.org examined job-loss claims made by the industry's boosters in Congress -- such as Paulsen's 33,000 figure -- and found that these numbers were exaggerated thanks to overly generous math on the part of the industry's advocates. (Much existing research comes from AdvaMed, the industry's official trade group in Washington.) As of October 2013, Factcheck's analysts found that perhaps 9,000 jobs in the sector -- at the very most -- have been lost due to the tax.

That actual number of job losses could very easily be the result of all the mergers and acquisitions that are taking place in the industry. And even these numbers may be a stretch.

Beyond that, a Washington Post article fact-checking the claims of Paulsen and others also found holes in their claims. It cited a January 2014 survey in which about nine percent of U.S. medical device firm managers said they did not have to lay anyone off because the tax; fully half of the respondents said they didn't change how they did business at all as a result of the tax.

What about claims that investors are scared away by the tax?

Recent numbers show that, on the whole, Minnesota firms are doing just fine. According to Medical Alley, 2015 was a record year for investing: Minnesota firms raked in a total of $434 million in investment dollars, a seven-year high.

There is really only one legitimate claim that can be made from the industry about the tax. It is a drawback for start ups and research oriented firms that operate in the red for several years before any breakthroughs. But I fail to understand why these companies cannot be granted exemptions in that regard.

The continuing problem is that the device tax is a component of the Obamacare funding mechanism. Republicans are concerned about the deficit and the debt, yet when the device tax repeal is brought to the floor, there is never any replacement funding suggested. The successful 2 year repeal does not offer any revenue stream as replacement and I guess that there will be some Congressional slight of hand performed to fix that.

The industry has been enormously profitable, but as in the rest of the economy, the rich get richer....

The GAO studied 102 medical device firms, from large companies (including Medtronic and St. Jude) to mid-sized and small firms. Overall, the audit found that from 2005 to 2014, medical device companies' profits increased by 43 percent, even through the difficult recession years.

That prosperity wasn't spread evenly, however: the 30 biggest companies accounted for 95 percent of net sales annually, and the smallest 37 accounted for one percent of that total.

But I can imagine you will figure out who contributes the largest portion of Congressional lobbyist money. Most of it comes from the top 5 companies... and Medtronic, the Irish inversion company, had their fair share.... they can afford it with $13.9 billion in profits last year.

Nobody in the Minnesota Congressional delegation questions the industry. They are strong Minnesota companies and our representatives feel compelled to do their bidding.

It is no wonder that we cannot balance a budget in this country - the corporate trough cannot be ignored.

Erik Paulsen: He Makes It Worse

When Republicans talk about tax relief and debt, there are usually two types of approaches. And although I don't particularly like either one, there is one approach I can respect, the other I can't. One approach just cuts taxes with a subsequent increase in debt....while the other offsets a tax cut with spending cuts. I respect the latter...the former is just hypocritical.

That's why this puffy piece about Rep. Erik Paulsen in Minnpost leaves me disappointed with the lack of depth.

I have talked about Paulsen's determination to satisfy his donor base with a repeal of the Medical Device Tax in the ACA. But the Minnpost article seems to be impressed with Paulsen's wonky approach to his job and mentions 4 particular bills --

A) Family Healthcare Flexibility Act. This repeals the cap on on FSA accounts for medical purposes....as well as the prohibition of purchasing OTC drugs with the account. More fudging with ACA.

So what two things do these items have in common (including the Medical Device Tax repeal)? Well, #1, they all reduce taxes. And #2, they all add to the national debt.

Erik Paulsen is good at finding taxes to cut or phase out or move around, but he is just awful at helping to balance the budget. Outside of a mention of the lack of offset in the Medical Device bill (a reason he does not get more Democratic support), the Minnpost article does not delve into the very real problem of repealing taxes without correcting for the revenue.

Paulsen has made a career for himself by characterizing himself as a tax cutter....but when it comes to cutting spending (the real wonky and often unpopular thing to do), Paulsen is terrible. He avoids that discussion altogether.

So praising Paulsen for getting all this support for his tax cut proposals seem very disingenuous to me. He does the easy part, but is very risk averse when it comes to doing the real work of government...balancing a budget.

So, if you feel that the national debt is your big issue....if you feel that the job of Congress is to get rid of that debt, then Rep. Erik Paulsen is not your go to person.